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Squawk on the Street

News/Business. Melissa Lee, Carl Quintanilla. Opening bell market action. New.

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03:00:00

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Virtual Ch. 58 (CNBC)

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mpeg2video

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ac3

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480

TOPIC FREQUENCY

Nokia 52, Us 31, Europe 22, China 21, Draghi 17, Carl 16, Zuckerberg 16, Charlotte 13, Greece 13, Costco 12, Spain 12, S&p 12, Jim 11, U.s. 9, Mario Draghi 8, Italy 7, Germany 7, Ecb 7, Cnbc 7, Lumia 7,
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  CNBC    Squawk on the Street    News/Business. Melissa Lee, Carl  
   Quintanilla. Opening bell market action. New.  

    September 5, 2012
    9:00 - 11:59am EDT  

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>> fine. >> i'll be here to pick up my money. >> the bet is just a straight -- >> he said 52%. then i offered a bet -- >> i said 51.7. >> i'm confident. >> how much for a popular vote? >> he is going out to dinner with -- and he is not going to have any money. join us tomorrow. "squawk on the street" begins right now. there we go. a little football music as the nfl season kicks off tonight. good morning. welcome to "squawk on the street." i'm melissa lee along with carl quintanilla, jim cramer and david faber live from the new york stock exchange. let's look at this the comments from the ecb president putting futures on a rollercoaster ride, pointing in the up direction right now. 2 at the open s&p. the nasdaq flat at the open. as for the action in europe disappointing data there but we have mixed markets with gains in
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germany, italy, as well as spain. our road map kicks off with those comments from mario draghi, futures pledging unlimited sterilized bond buying as the ecb meets tomorrow but the blip is short lived. >> maybe more signs of slowing growth. china nmanufacturing data comes in weak. australia's second quarter gdp misses estimates as well. >> fedex adds fuel to the fire, warning for the august quarter blaming a global manufacturing slowdown. it could be the first quarterly decline for the company in three years. >> mark zuckerberg says he will not sell any facebook stock for at least a year as the social giant sets up what is essentially a $2 billion buy back. >> and nokia announces its new make or break phone today. we talked to the ceo first on cnbc in our next hour of the show. let's get to those draghi comments. one day before the european central bank policy makers gathered for a key meeting a wire report says the bond buying plan being pushed by the bank's president mario draghi pledges
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unlimited sterilized buying. the ecb not providing comment on the report so far. meantime more signs of a slow down in china, the country's services sector grew at the slowest pace in a year in month of august according to the hsbc private sector survey. all the data points, jim, very concerning. and these comments, a lot of traders this morning are sort of dismissing them a little bit because they say two central bankers and as we all know there are so many central bankers in europe. we don't know who is saying it and why. >> this is, at the crux of what's gone wrong right now. there are two ways people are playing this market. the hedge funds are either saying, okay, look. we have to play the relief when ecb does the right thing and then there is another hope. listen, we have to get back into dividend stocks. we need the safety. this is the soul of the market. it is in the hands of the eflt cb not the hands of united states. >> we should point out tomorrow we will get some sort of plan or are expecting to from the ecb perhaps some details about a bond buying plan of some kind
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that we're hearing some things about today. the market may be disappointed in that these reports seem to indicate they'd be targeting three years and less in terms of maturity. that they would not have a yield target perhaps, say we're not going to let it go above 7%, and that it would be sterilized purchases. there are some who believe, hey, you need to actually increase the money supply. really if you're going to get things moving in europe but of course the germans are always concerned about inflation and sterilization which basically means they'll try and take in as much in deposits as they buy in bonds. sort of keeping -- >> somebody tweeted this morning fed bernanke needs to show them how you really print money. and, jim, one other facet of this report is that the head of the bach the german still remains the one lone hold out to this bond buying policy meaning draghi maybe has not made his case where it counts. >> obviously that would be terrible for much of our equity market, much of the market is
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hoping and praying that we will begin to see relief in europe because of actions that they take now. we got to see it. carl, we got to see it. i mean, this is not one of those where it's up in the air, it's okay either way. because of fedex which we're going to talk about. fedex shows you, listen. unless we turn the economy around we're going to have a lot more fedexes. >> let's bring it in. shares falling in premarket the package delivery company has cut their earnings guidance as weakness in the global economy constrained revenue growth at fedex express more than expected. fedex now seals the $1.37 to $1.43 for the quarter ended august 31st. analysts were looking for $1.56 per share. we should mention express handles a lot of the international, jim. that's what they're seeing, a global problem here. >> we saw july 25th u.p.s. said something similar. fedex did not say at the time. this is the first time we've had down quarter for fedex in three years. i think that the natural assumption is maybe amazon is not doing that well.
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i don't want to make the natural assumption because there is just, the derivative play is always so fraught going into the holiday season. but i do think that fedex is -- transports have always mattered to me. testimony pers your enthusiasm and makes it even more important the ecb do the right thing. >> the other assumption from fedex and what they're saying we may be able to make, according to wells fargo, airport data points were decent in june and july which could point to a deterioration in the month of august. so have we seen an okay june and july and now we are here at the end of -- you know, beginning of september and we actually have the data points now coming in that prove that august is in fact slower than expected? we got all the data points out of europe and china to that effect and now we have fedex as well. >> i don't think you can overstate how slow europe is. we can sit here all we want talking about the ecb and bond buying or not and what it will look like. i talk to people who do business in europe. there is not much going on. later today we'll be joined by mark shaffer who runs global m &
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a at citigroup. there is virtually no merger and acquisition activity going on in europe. there is just so little happening there. and that is impacting china, which by the way is the top of the list now making calls yesterday, talking to a lot of the hedge funds i hadn't checked in with in a while. top of the list in concerns in terms of the chinese economy, where it's going. all of which is reflected in the warning from fedex. it is connected to europe, to the commodities play you talk about so often. that supply/demand line for commodities is looking really ugly even if you get 6% growth and some are talking now about 5% in china. >> i always -- i dislike talking about a place like australia because it is not big. okay? it's not a -- but australia was very bad and it was very bad because of iron ore and it's very bad because of china. all of this is connected. i'll play devil's advocate for one moment. unless we hear that fedex is saying point blank they see a
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slowdown in the united states, i continue to see good retail in the united states. i see good housing in the united states. how many times did phil lebeau come on and say every single auto maker 14.5 million autos? i mean that's booming. union pacific, things are great. so you just get a picture that says, wait. need to go back to the u.s. again. >> three months of contracting isms. that's a problem. deutsche bank is out this morning saying if you correlate ism to the s&p you would either need a 10% correction in the market or ism back to 54 to justify the current level. >> well, if it's either/or -- the former certainly makes more sense. >> we keep it going. we're reflecting china and europe in the lack of growth in our economy or are they really going to bring us down? >> they reflected china in the chinese stock market which is really hideous. you want to see a real bear market, by the way, versus these
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european markets. we can say all the negative things you want but you made more money in germany this year so far than in the united states. something isn't it? >> a good point. >> to the point you mentioned earlier strength in the united states if we do see because we are entering a very key season for fedex, shipping a lot with the holiday season and also some analysts are pointing out ipad and iphone sales. if apple comes out with a new product can you imagine the other part of the i-economy is fedex in that they get those products to the consumer. if we see a huge demand for the new products that could be a help for fedex. >> you could be right. fedex, wells fargo noted in fedex if you want to see it, a lot of people are saying listen. people don't need overnight service. they just need a couple day service. and that's a sign of cheapness. i also remember amazon's built warehouses everywhere. so you may be able to get next day even just because their warehouse happens to be down the block from you. >> very true. let's talk about facebook
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shares. we were watching them rebound, surprise, surprise, in the premarket after hitting post ipos in yesterday's session. in a regulatory filing ceo mark zuckerberg says he will not sell any facebook shares for 12 months and the company will not sell any stock to cover a $2 billion tax bill related to stock compensation. the shares have lost more than half their value since the company went public in may. the company is putting up a mode, a floor under the stocks. that won't solve the problem of if fundamentals are deteriorating and there is just natural selling going on, a moat won't be big enough. >> they said, look, this is not what we need. we need to see a desk top to mobile strategy. on twitter immediately people are saying you're digging in your heels. no. look. it's good that zuckerberg is not selling. >> yes. >> it is good they are shrinking the number of shares. these are good things. i understand the stock bouncing. if they actually announce they've found a terrific way and they're seeing mobile doing
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better the stock goes to 25. but that's -- they got to have a strategy. >> yes. >> moving up some of the lock up expirations is pretty astounding. on october 29th talk about being close to halloween, 234 million shares will open. there have been some notes in the past week, jim, saying don't expect any real momentum until december because of the november expirations. is moving that up making it better or worse? >> trick or treat. it's obviously trick. yelp is 0.1 of 1%. >> it is. >> but people who gain these expirations, get the lock ups. they'll be short ahead of it. it's always difficult to feel how much is short ahead of it. once again we are talking about trading strategies not fundamentals. >> no we're not. all right. we want to talk fundamentals on facebook, what do we talk about? >> i don't know. >> what do we say? >> did you hear zuckerberg in his speech yesterday or listen to him last thursday? >> no i haven't heard him lately
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say anything. >> anything, interviews? >> i think if we saw his face. >> october 23rd is that earnings? >> earnings are mid october -- 20 something yeah. meanwhile a couple of websites tried to frame this as a buy back because they're withholding some stock grants to employees, paying the tax bill out of cash. is that a fair way to look at this? to reducing the float overall? >> it's incredible. people want to stretch it and say this is terrific. look. there's a lot of shares here. this is a drop in the bucket but people are covering today. people are going to now be thinking maybe they've got something up their sleeve. maybe they're going to announce something. look, you want to announce something facebook go by twitter. >> right. >> go get game set match social because that's what you need to do. >> what would they use? maybe the $10 billion in cash? or would they use their stock? >> twitter, we'll give you stock.
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>> you want to deal with that guy he's going to give you stock that's too expensive. >> get pantsed. i have to revert to my fifth grade word. i learned that was the operable term when you really got, you know -- >> worse than a nugie. right? >> not as bad as a wedgie though. >> degrees of it. >> can i say wedgie on television? >> of course. come on. >> it's what many wall street analysts are calling a make or break moment for nokia. today the finnish phone giant set to launch the lumia smart phone. the announcement comes a week ahead of apple's big event in which that company is expected to release iphone 5. nokia suffered mounting losses in the face of stiff competition from apple as well as phones powered by google's android software. samsung has surpassed nokia as the world's top seller of mobile phones. we'll have a live interview with the ceo of nokia this morning at 11:45 a.m. eastern time.
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it's the lumia 920. if you weren't happy enough with the lumia 900 you should be now. >> dump my iphone immediately. i'm asking syria right now where i can get the lumia. nokia, everyone wants to -- everyone is recommend nokia. it's already up 60%. of course it's down 70% and was at 62 ten years ago but i do want to point out that this is another one. any news, like any -- that's what people are saying. my problem again is i want nokia, i actually want to see them do better. i'm sorry to be such a throw back to the old days. >> with cowboys tonight. >> that is on nbc. this is a pox on both their houses for me as an eagles fan. samsung, you read the stories tan's like hey samsung is coming in. nokia says no. it's an after thought. nothing that samsung does is an after thought. they are very powerful, very
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strong company. i think that people under estimate them constantly. >> will we know in the next six months based on sales of the lumia 920 and 820 whether nokia will continue to operate as a viable business? >> wow. >> this is a make or break phone for nokia. it could be a make or break phone for steven elau. his two-year anniversary is approaching. under his reign the company lost 3/4 of the market cap. that is not a good track record. >> it is make or break. i think that we've seen this play out. >> yes. >> it can be. you know, you cannot -- sometimes you can't break out of the spiral. there has to be some raise on debt for buying nokia. nokia is going to revert to being just a river in finland. >> translation. >> if they don't -- >> the one thing, keep it very simple. the one thing it is said to have, wireless charging. hello. nice. >> ooh. >> i don't even --
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>> wow. >> no plug-in adaptors. you just put it near something else. juice up. >> that could be good. martha stewart once complained about too many different adaptors. >> chargers. >> martha stewart, mso, i think it is a similarly priced stock to nokia. yes. a foot race. >> ouch. >> oh, man. that's going to be a good one to watch. >> i like her. >> i know you do. >> race on debt was to counter pants and wedgie. >> we'll elevate the conversation here. all right. >> now we're mediocre. >> when we come back a live interview as we said with the head of nokia on this big day. watching the company's new smart phone launch. what is at stake for the finnish phone giant? does he see it as a make or break product? take a look at futures on this wednesday after a 55-point drop on the dow yesterday, implied open up 18 as "squawk on the street" comes back after a break.
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the same man who started his career by turning down high paying jobs and instead working in struggling neighborhoods where a steel plant shut down fighting to get folks back to work. for barack success isn't about how much money you make but the difference you make in people's lives. >> first lady michelle obama at the democratic national convention last night making the case for re-electing her husband
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the president. in the next hour of "squawk on the street" we'll go to charlotte to the dnc and get a live interview with the cofounder of costco, the former ceo who has had long standing support for the democratic party. we'll talk more about that, 10:30 a.m. eastern time right here on "squawk on the street." he has put his money where his mouth is and tried to keep it a little more quiet during his tenure, active tenure as ceo, jim, but now that he is basically retired -- >> wasn't that something, your documentary remains the best way to understand this man's thinking and how he offers the best single employment plan of any private company i could find which is why, carl, how important is retention of employees? with retail it can be as high as 50%. >> amazing story. facebook ceo mark zuckerberg will make his first public appearance tuesday since the tumultuous ipo in may. it will take place in san francisco at the tech disrupt
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conference. facebook shares hit a fresh all time low in yesterday's session. that brings us to this morning's squawk on the tweet. what can mark zuckerberg say in his first post ipo interview to turn the shares around? tweet us at cnbc squawk st. we have your answers throughout the morning. jim i would guess you'd say buy twitter. >> that would be very big because a lot of people are saying i'm leaving facebook for twitter. it's more fun. facebook is about fun. also, look, the monitorization plan we're doing with the sub rosa ads is working. these will all be good things. the fact he is going to be seen publicly is a good thing. >> david, are we making too much of mark zuckerberg not being public? would we care at all if the stock were flat or okay? >> i don't know that we would. >> you know, how often do we typically hear from ceos in a public setting? it depends. >> around earnings maybe. >> they are often on "the call." was he -- he was on "the call"
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the last earnings call briefly. >> a little vision about how, listen, we're not even worried about this transition from desk top. >> it's not a broken covenant, a broken stock. >> right. >> well, it is a declining in increase of revenues. in other words still increasing. >> yes. >> but the second derivative. >> in a different world this company would have gone public earlier in its gestation. >> yes. >> with a much higher growth rate. >> right. >> and it might have been a very different story. >> interestingly s&p by the way which is one of their buys, facebook is reiterating their buy opinion takes their target from 25 to 22 and says that things like the new iphone app which i don't know if you tried is much faster. >> have you tried it? >> in s&p's words has contributed to greater engagement. >> that would be big because engagement is the issue. you just don't look at your cell phone the way you look at your desk top. i look at my desk top the way i look at tv. i look at my cell phone get the
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latest update of how bad the -- it's going to lose. i check into the eagles. on off on off. otherwise looking like wow. mlb.com. nfl.com started today. >> that's right. >> nbc. coming up next cramer revs up a last-minute drive for the opening bell. how will he help you score? his mad dash is on next. let's look at futures as we head to the open on this wednesday morning. we are looking at the dow and the s&p 500. much more "squawk on the street" straight ahead. at u.s. trust, our expertise extends well beyond investment advice and research analysis. it includes proprietary offerings like our eldercare program, which helps provide for those who came before you. and our financial empowerment program, which helps prepare those who come next. resources like these have made us the number-one trust company.
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sounds like some super hero music for jim. how appropriate? a few minutes before the bell. let's get the mad dash ahead of market open. dollar general raising forecasts. >> this is eli manning. okay? nothing flashy whatsoever. and yet there it is. continuing to do well. what i like about dollar general is it's expanding so it's got the growth. it's continuing to have terrific same store sales so it's not just putting up stores. it's moving into california. and, quote, buy back, this is, in this segment, represents what's endemmic in the country. people trading down but if you figure with dollar general or dollar tree, my favorite, you see that these places aren't as bad as they used to be. they start selling food, they got foodstamps going. i like this sector. still, people have been freaking out because the chart is bad. all right? maybe this reverses the chart.
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>> sort of brings to mind a call out of deutsche bank on william sonoma today as well. >> right. and conn. it's a company people think is like best buy. it's mattresses that are doing well. it's furniture. okay. william sonoma. expensive things in your house. pottery barn. i've got a great table at pottery barn at the outlet recently. geez. this is not a cheap stock. at the outlet i did save doesn't it fly in the face of confidence numbers that aren't good. >> right. >> and gas prices that aren't good? >> auto sales, gas prices haven't stopped. look at this. a very well run company. this is what keeps me from being over gloomy to use a german modification. because, boy, i tell you, if it's spain we're looking at, you know. >> we should mention too. some reports of potential ipo this fall out of hudson's bay which runs lord's and taylor the oldest company in north america. goes back to 1670.
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>> i know. like the hudson bay trading company. you know, look. we don't need another retailer. >> yeah. >> but i will say that keep an eye on the sherwin williams. that was the beacon yesterday when things got better. keep an eye on whirl pool. this segment still works so to speak. i think it is important to point out some segments are working. >> we'll get the opening bell in a moment.
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trade commission-free for 60 days, and we'll throw in up to $600 when you open an account. here is a look at the opening bell this morning and a shot of the s&p at the top side of your screen in just a moment. here at the big board a provider of offshore drilling services celebrating its 25th anniversary. over at the nasdaq maker of integrated analog and mixed signal semiconductors. we covered a loft the big names here this morning. did not touch on monsanto. >> that there may be a problem with the -- >> yeah. saying some of their corn seeds might -- might start to be developing a resistance. >> dupont, one of the key reasons why dupont spent so much
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money trying to catch up with monsanto, a great biotech company. i am frantically trying to find out more about this. this could determine the fate of the stock that has been red hot. it does matter. got to find out more. >> we're watching apple as well. there was a price target raise on apple. that's what you're watching. >> yes. of course we're awaiting september 12th, finally a date to the event. it is funny because ahead of the event we have all of the smart phone launches, new product launches from nokia, google, motorola mobility and they want to squeeze out because after iphone 5 is announced and launched, nobody is going to pay attention to anything else probably. >> no. it really would be amazing to have that pull into the calendar year fourth quarter for apple because i don't think people are looking for -- the ax, talking about how this could be very big. look. apple has been a horse. someone asked the other day. does apple, was apple the only stock you need to follow to determine the market? it was up yesterday. no. but apple has made you a
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tremendous amount of money and as long as it has it's like a -- we need europe to be strong for the real market. >> if the market has a pacifier or binky it is apple. >> i like that. >> said the father of 3-year-old twins. last week we were watching google and apple stock prices sort of intersect and to the degree that there really is a divorce between the two platforms, i wonder if you think google is a short here or not. >> i don't like the short google because search works so well on mobile. so a lot of the problems i'm attributing to facebook are really google -- the search is just -- you don't need that big engagement but, boy, it's so good on iphone. i'm willing as a user to say it's time to bolt from that. >> we talked about transports at the top. you mentioned union pacific versus fedex versus u.p.s. one other thing to watch, small caps. the journal makes a point that the gain in august --
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>> how do you like that? >> 6% versus s&p. almost catching up for the year. generally a sign. >> domestic? >> a little more beta, something to come. >> domestic growth. >> that's been a continuing theme. you're going to wish you bought caterpillar hand over fist. it is nice to think there are people doing work on companies that are smaller. yesterday i had hechtman on "mad money." there you go. the stock has been down horribly but he makes an acquisition in the bachan and bingo. >> nice move for shares of hechtman this morning. sort of an interesting note, what if sort of note. what if wells fargo went out and bought discover financial? they don't have a credit card portfolio or offering so why not go out and buy it? it could be in the first year after it closes, what is the
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price share? $46 a share in cash and stock equivalent to $23.7 billion deal. pretty big deal. we're not seeing the stock move too much but sort of an interesting intellectual exercise. >> i put pen to paper obviously. dfs is very cheap versus mastercard and visa. normally we never want to recommend a stock based on take over basis but look. it is -- >> you have wells fargo though. would you then be less keen on wells fargo if they make this big acquisition into credit cards? >> i think wells fargo is doing exceedingly well. they have the magic touch right here. i really think as warren buffet knows, they own 30% of the mortgage market. we had a housing boom, at least the boomlet. wells is just in the cat bird's seat. >> interesting headlines. this out of the uk telegraph which always you have to consider but where the department of justice might be saying that bp had willful, gross negligence, misconduct. which could multiply their
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damages into the tens of billions of dollars. >> the nightmare never ends. obviously the justice department can put any company out of business. the justice department, look, you get the wrong -- they'll have to leave the gold. who the heck knows? i read that and said there are so many buys. why would anyone insist on this particular land mine? >> i brought up tony hayward as we saw in the times over the weekend is running another oil company privately backed. still trying to make good for a difficult run. >> russia issues, this is a stake, a lot of companies aren't staked into the patch. >> let's check with the guys on the floor. >> i love, bob, just to turn to you and set us where we are in terms of all of the different stories we've gotten this morning that the market is keyed off of about mario draghi and what the ecb may or may not do. perhaps as soon as tomorrow when it comes to buying the bonds of sovereign nations particularly those in distress like spain
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we are in the land of big, unsourced, vague rumors. all over the place. nobody attributes anything to anybody but there are reports of unlimited sterilized bond buying programs. here is the big issue. what are the conditions that are going to be attached to this? draghi, everybody in the same camp. there will be conditions attached to any kind of bond buying program. so remember what happened with greece for example. there is a memorandum of understanding with greece about how they dole out the money. there will be a memorandum of understanding with spain or italy or anybody else who comes out and asks for this kind of money. i think part of the problem and what's being talked about today is what exactly is going to be in this memorandum of understanding? it's going to be some kind of control over the budget process and it's going to include a very close look at the books of these countries. now, do you think spain particularly wants the world to look at their books? remember when they opened the books of greece? they discovered they were under estimating deficit spending for years and years. they were kind of cooking the books in other words. i think there will be similar
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issues with spain. this is a lot of the discussion going on about why the spaniards are trying to push this off right now. bear that in mind. but that is not draghi's problem. draghi's problem is to come out with a big, bold plan of bond buying. and that's what he's coming through. deeps or whatever, this guy is masterfully handling this thing. market wants big, bold plan from mario draghi he is going to figure out a way. let spain worry about the details about the memorandum of understanding and work out the details they need to. that's where we're at right now. >> where are we with the germans in terms of onboard? with the big bond buying plan? >> draghi and monty have split the germans right down the middle absolutely masterfully and they'll be dragged along. did you see the bond auction this morning? it failed. oh, my heavens. it failed? this is great news. remember the yields were negative at one point. who wants to get low yielding bonds right now if the mark is more stable? it is a sign of less fear that people are willing to go out and buy these low yielding bonds.
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it's not a sign of disaster or terror but a sign that the markets are calming down. it's very good right now. i want to mention fedex. we're opening at a three-month low on fedex. the problem is weaker global command, higher jet fuel crisis and more importantly weakness in china. that's having an impact on the volumes intraasia. fedex is important because they have a quarter that ends in august. there are not a lot of companies with quarters that end in august. pay attention. i made a little list here. oracle has a quarter ending in august. haven't heard anything yet from them. adobe ends in august. they're going to be reporting in a couple weeks. jeffries does. so does discover. also quarters ending in august. that is just a short list of companies that have their now -- >> overlay that with ones that do a lot of business in china and -- >> oracle is very big internationally. i would definitely keep an eye on oracle.
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but obviously this is a little bit of a concern. in fact, the transports have underperformed the industrials in the month of august. we note thad they were down a little more than 1% with some of the big international freight companies under performing as well. once in a while the stock market actually does get it right. they did telegraph some weakness here and maybe of course hinted at this announcement from fedex today. >> thanks a lot, bob. send it over to you, mr. cramer. >> great discussion on what is actually making positive in this market. shift the bonds ahead to tomorrow's big ecb meeting. rick, how you doing? cme group in chicago. >> thanks, jim. you know, tomorrow morning of course as jim pointed out ecb, big meeting as the markets in europe may get more institutionalized and to many that is the answer. to many others the answer is to institutionalize the central bankers trying to institutionalize the markets. either way you want to fly markets are moving in a way that is somewhat fascinating. let's look at a chart starting on july 1st of our ten-year rates. for the most part you blur your
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eyes, we're roughly at one-month low yields. but as you jump across the pond and look at yields on the ten-year bond you can see they have turned up. less safety, coming out tomorrow, big bazookas maybe. we look at the spread and can see it's hovering around 13 basis points as you compare the two. 158, 145. this is kind of the tightest it's been in about a month and a half, month and three quarters. if you look at how the euro has led the way into what may or may not be the solution offered by mario draghi tomorrow it is clear the euro is on top of its game. so let's summarize. we have our yields moving down because maybe ben bernanke is going to buy more even though the economy and some of the data looks better and overseas flight to safety diminishing but yet the euro currency continues to fight hard and the boon giving um some ground. important dynamic. pay attention. we have more data and a lot of the pmis around the globe have
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disappointed. we'll keep an eye on those. >> great summary. let's check out the latest moves in energy and metal. >> good morning, jim. we're watching u.s. crude prices. they are slightly higher this morning. part of that has to do with the 20% rise in sales we saw last month in the u.s. the thought is that we may see more consumption but at the same time it's tempered by the factory numbers. isa yesterday, weak numbers out of china. but the flip side of that, however, is that the numbers may call for more stimulus. so all eyes are going to be watching on the ecb in europe. potentially watching gold prices as well hovering just blow 17 after hitting a six-month high yesterday. but of course we'll be watching gold ahead of the jobs report and the ecb meeting as well. carl? >> thanks so much. watching energy and metals. gold, jim, 1700 yesterday for the first time since march. and i know you say you like it here. >> i do. >> i wonder if you like it a
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little bit more given what draghi said today. >> i think anything that says there will be printing, if they are -- if they flood the world with euros, by the way the euro looking good today back to 125. then gold gets higher. i like gold. can't find the darn stuff. let's not forget there is a supply and demand element to gold. and also china. if i were in china i don't know if i want to own that chinese currency. i'd want to own gold as much as i can provided the government doesn't confiscate it as we did in this country in 1934. >> the other side we're watching this morning amd shares down by about 5.2% right now getting a downgrade by ubs and the central thesis is the pc market is shrinking. it is something we already knew. they're not in the right areas of the market. >> amd. people try to catch the bottom in amd. they just can't fit -- people are addicted to trying to catch the bottom in the $3 or $4 stocks. it's okay if you have good man
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anlgment and a game plan. >> intel lower as well. the semiconductor index weighed down right now by amd. meantime as we mentioned facebook ceo mark zuckerberg set to give his first ipo interview next week. what can he say to turn the company shares around? tweet auns let us and let us kn you think. take a look at the early morning movers on wall street. hi. i'm henry winkler.
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zuckerberg. two days away from the big number of course. that is the august jobs number. another opportunity for you to nail the number. we're asking you to tweet us your predictions for august nonfarm payrolls. our handle at cnbc squawk st. use the hash tag nail the number. this month's prize in the hands of one jim cramer right now. a back-to-school bag signed by
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the "squawk on the street" gang. >> this proves we actually sign these things. >> this is not auto signing. >> not on. >> is anyone else tweeting at 3:45? you have an assistant that would get up at 3:45? give me a break. >> you have one minute before the friday release to make your pick. go all the way up almost to the wire. we'll get the winner of course on friday and talk to them hopefully. this is not empty by the way. >> not just a bag. >> no. >> it's major. >> you have to be kidding me. >> say what's in there. so good. amazing. >> smoking. >> you have to keep it a secret? like mass elus wallace's brief case? >> david, do you know what is inside this thing? >> no idea. >> unbelievable. >> a bigger secret -- >> heavy, toochlt like go, like something. the facebook ceo will make his
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first public appearance tuesday since the company's ipo back in may. this morning we're asking you this question. what can mark zuckerberg say to turn facebook shares around? a few good answers. larry rights zuckerberg needs to say he is now in contact with the mid level angel half-ya kchk steve jobs. >> we're selling to apple. john writes facebook is really cool. here's sheryl. she'll answer your questions. sounds like somebody on the call. >> exactly. >> look. >> stock is up. come on. come on. stock is up. >> up nicely. >> up nicely. >> yes. 3.7. >> hold on just a second. >> is it in there? >> it's in here. the whole company. no instagram is not in there. >> after the firing last night and word that he is going to talk publicly, this could be the
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beginning of the defense. right? the defense is on the field. >> look, i think defense can score. i mean this could be the baltimore ravens. >> in the context of sports dipping defensive may be good but in the context of being a publicly traded company whose stock is on the decline and is trading close to all time lows post ipo, the optics of defensive not good at all. i mean it looks like a direct response, peter teal selling out most of the shares on the first lock up to put out a statement saying mark andarieson and don graham have no intention of selling except for tax reasons. >> you nailed it entirely. amen. this is entirely involving, hey look. teal did it. don't worry. >> not going to happen again. >> we're done with that. but again, stocks up today. we can't be -- >> a sharp stick in the eye. >> nokia is not up unfortunately. lumia is not -- >> the key to the market is conns.
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it's up. >> you love the alta salon. >> these are domestic plays. that's why i like to talk about them. conns a domestic play. 52-week high. people thought it was another best buy. no. better. >> it is? why? >> because it's furniture. >> what? >> furniture and mattresses. >> they sell everything right? >> they sell everything. it is a housing play. look, i'm trying to -- >> you got to try out your mattress. you can still go buy it off -- >> with the tvs you can simulate -- >> sending it back is a bit of a hassle buying it online. >> doesn't fit in the computer. >> try to come up with some companies that fit that scenario of what we talked about. these are what people are buying. >> true. >> they are buying conns, my friend. this is like yahoo in 1999. >> oh, please don't say that. >> david and i remember a different era where yahoo -- >> we go back to that era a lot. >> pfizer was the key to that market. they had a new drug. >> somebody wrote this morning facebook is now twice the value of yahoo as that spread begins
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to narrow a little bit. >> it will be interesting to watch later on this fall. >> yeah, it will. and yahoo, it's funny. we haven't talked a lot about the about face of the activist investor there who you would fully expect to have said let's just go for the short term, get the money, return it to share holders. sell the estate. now he seems willing to allow the new ceo to actually try to implement a strategy that will turn it around. that is a big about face for an activist and not typical. something we haven't really touched on that often in the last few weeks. >> did it make you feel he was intimately involved? >> absolutely he was intimately involved. even then it is a little odd given the tactics of an activist who almost always said, hey, let's get it done. >> dow relatively flat here trying to weigh both the fedex warning and what draghi said. a lot more "squawk on the street" still ahead. at optionsxpress we're all about options trading.
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♪ in motion yeah >> almost 10:00 a.m. on the east coast or as we like to call it simon hobbs time. >> oh, yeah. good morning. how exciting on a scale of 1 to 10 are you about the launch of the nokia phone? he's gone. ah. we'll get a glimpse of the new nokia phone in the next hour of the program before carl interviews the ceo of nokia. we'll talk about that in the next hour. also ahead the analyst who thinks you can still double your money on facebook. a facebook fight on "squawk on the street." and also the democrats will tell you why they're good for business. the cofounder of costco will join us live from the national convention. yes he is a democrat. carl, back to you. >> thank you very much. let's get 6 in 60 seconds give
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or take a few. we'll start with chesapeake the fact that something didn't happen, equal weighting, it's died down. i think that is the beginning. natural gas. >> eli lilly from hold to buy. >> this is a charm stock. it's because of the potential alzheimer's drug. that is why he likes it. i think it's cheap. >> even with some of the mixed news. >> yes. >> natural resources. >> people don't want to call bottom in coal but union pacific says they see a bottom and that is more important than the analysts who keep downgrading. i don't like coal but i point out there is another side. >> more reaction to the halliburton announcement? >> it wasn't bad. they said -- international is strong. >> starbucks, oppenheimer likes the valuation. >> we need this one to go higher. it just never seems to lift. >> then aol. needham says a buy. >> jim armstrong. why don't we talk more about this guy? he is the most brilliant. of course the $19 price target
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upgraded yesterday. wow. i like tim armstrong. i like the stock of aol. they've done a great job. >> very smart. what is on tonight? >> i have a guest to talk about the nfl, you know, normally once a goldman, baltimore gas & electric. mike jennings. this is one of the hottest stocks in the world refining. i've been begging a refineries to come on and we have one. grubman of course we have the game on cnbc tonight. big cowboys, very important game. they both lost. that's my hope. they need to both lose. can you do that carl? >> i don't think so. though no giants team has repeated as champs believe it or not. >> eagles, 1960, yeah. that was just yesterday. >> 8:30 p.m. eastern on cnbc. thank you. >> thank you. >> when we come back costco's cofounder jim sinegal live with us at 10:30 a.m. eastern time speaking tonight in charlotte.
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the road map for the next hour mark zuckerberg says he will not sell facebook stock for
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at least a year while the social networking giant prepares for what is most likely a $2 billion stock buy back but is the bounce in the shares today short lived? >> plus the transport is taking center stage today after fedex cut its profit outlook. citing fears of a global manufacturing slowdown. should you buy into the weakness? >> first lady michelle obama making the case for re-electing the president last night at the dnc. we'll sit down with jim sinegal for his take on the dnc message as he gears up to speak in charlotte tonight in primetime. >> we begin now by tracking shares of facebook this morning following news mark zuckerberg will not sell stock in the company for a year. the social networking giant also saying it will allow employees to cash in their stock weeks ahead of schedule. facebook shares hit a new low yesterday. now trading higher by about 4%. 18.40 is the level. the senior analyst at web verse securities and i'll start with you. you have an out perform on this stock. you didn't think the lock up
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expectations were a big deal to begin with. do you think the stock's bounce today -- i mean it's a flimsy bounce. >> i don't think anybody is surprised that zuckerberg is not selling. i think the more important two statements are that we've got two directors who are only selling enough stock to cover their taxes so they're showing a renewed commitment to the company. we didn't see that from peter thiel a couple weeks ago. then second, the company is actually buying in 101 million shares as part of this lock up expiration. so there's actually a buy back in place. that's a mild surprise. it shows again the company thinks the stock is cheap and the best use of its cash is to buy in those 101 million shares. that was a mild surprise, that they are not selling any stock or at least no more than to cover taxes is a mild surprise. zuckerberg not selling wasn't a surprise at all. he has to be committed to the company. >> so the mild surprises combined, you lowered your price
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target recently to 35 bucks from $44. could that actually even bump that mildly higher? >> no. i lowered my price target mostly because they're spending more money than i thought. fundamentally the company is no different. the buy back is about 4% of the outstanding shares so i could take my 55 cent estimate next year up to 57. who cares? it's not going to really change my valuation significantly. so no i'm not going to change my target. >> you know, michael says it is a mild surprise two directors are saying they won't sell except for tax purposes but at the same time the optics of this move seems to be directly in response to the market's reaction to peter teal dumping most of his shares at the first lock up expiration opportunity. are you concerned perhaps that the company is just playing defensive at this point trying to get their arms around the story and maybe are in a position where they may not be able to do that? >> i actually don't think it is
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in response to what peter thiel did in august. i think really the issue here is reaction to the stock price. maybe the moves would be different if the stock was 38 or $40 but given where it is today i think it does make sense them making these moves and i'd also characterize it as a mild surprise. >> i'm very concerned with the analysis you're bringing to the table here that is you believe in fact the company is becoming more aggressive in monetization and arguably may not be achieving what it thought it would achieve. could you flesh out where you are and why you are substantially lower than michael on your price target? >> sure. well, we have put out a piece of research yesterday showing that since the ipo facebook has gotten a lot more aggressive in terms of monetization. i do think that is in direct response to the slowdown they've seen in growth since q 4 last year. we highlighted seven new advertising tactics they put in place just since the beginning of june. i think that's a big shift for them. historically facebook has been a company that's as full as they
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can in terms of monetizing with advertising. that has quickly changed and this is quickly turning into an advertising company rather than an engineering driven product focused user first company. they have to be very careful with that. they've already seen a significant deceleration in user growth in the u.s. and europe. if the site becomes too laden with advertising we think they could fall into even slower growth. >> what is your target, evan? >> this is a neutral rated stock for us so we don't have price targets here at the firm on that but what we've been talking about is right now, you know, this is a huge lock up expiration that people have been coming, seen coming from a mile away. we did an analysis of this internet class, the ziyngas, groupons, facebook, it became clear the average name was down about a third between the first date of published wall street research and the lock up expiration. really what we're saying is let's get the lock up expiration out of the way and get more details on what they're doing
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with sponsor stories in the amount of time and see how aggressive they're being on the monetization before we start recommending the stock. >> michael, does that make sense to you, give it the fall come back around holiday season? some of the expirations are done. and judge whether or not the new aggressive stance on monetization has worked? >> i do. i have to say evan is one of my favorite analysts personally and professionally. great guy and really good analyst. >> uh-oh. >> nobody thought facebook was going to continue to growth fast in the west. we know they're pretty much saturated in the u.s. and europe. the thing we really did expect was that they'd show a commitment to monetization. everything evan pointed out is accurate and reinforces my belief the company is laser focused on growing revenues. what we need to see are they going to turn the revenues into profits? the big surprise at earnings time was that they're spending so much more money. i think the investment is to continue this growth but they aren't being really clear about
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it. once investors see both revenues ramping for the reasons evan just outlined and that spending is under control you'll see profits and we see profits, the share price is going to go up. just has to show us the profits. >> in the meantime, michael, you must feel increasingly lonely with your $35 price target. we had some big guys involved in the ipo, other big guys apart from yourself who are cutting yesterday. you don't feel you should cut you've been at this $35 for a long time now. >> yes, simon. i'm the guy who had an $80 target on netbooks when it was at 300. i think melissa remembers talking to me that day. >> yes. >> i'm pretty committed. when i believe in something i believe it. i'm not going to change just because the share price moves from my target. this thing is worth 35. i think we'll see 35 a year from now on. >> what do you think about those that have cuts? for example -- >> what do i think about what? >> those colleagues, those rivals who have cuts in response to where facebook is trading? >> yeah. i think you said it exactly right.
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they cut their price targets based on where the share price is not based on what the company is worth. i mean, melissa and i had this exchange a year ago about netflix. she suggested i raise my price target merely because the stock had gotten away from it and i disagree. the stock is worth what it's worth. the public doesn't understand that right now. so it's our job to help educate them about what it's worth. it's worth 35. i think people could make some money if they buy it here. you may have volatility on the next lock up but after that i think it is actually a solid buy. >> michael was lonely back then on netflix. he proved to be right. and he gained more company as a share price went down. so it's great to have you both. michael and evan. >> thanks. >> thank you. meantime the door is opening just moments ago for the big nokia microsoft event as nokia gets set to unveil its new smart phone here in new york. the lumia phones run on the latest window software. our own john ford is live outside the big event with more on what analysts are calling the make or break product for nokia.
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john, good morning. >> good morning. this is a key moment in nokia's survival strategy, a key element. it's been two years since steven elop took over as ceo of nokia. this is his most important public appearance yet. let's talk about why. what we expect is the lumia 920. redesigned lumia phone, similar in several elements to the previous version, the first version a larger screen, better camera, megapicks els and software to make the camera perform better. we also expect to see of course windows phone 8 the revamped version of microsoft's phone operating system that should bring it more on par with android and iphone in terms of its capabilities. now let's talk about the broader context of what nokia is facing here. you can see a two-year chart here of how nokia has been performing about ten bucks with elop took over, down below three bucks right now. so quite a precipitous fall. a couple reasons for that. it is not just the high end phones. the iphone and its ilk eating
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away at nokia's high end which used to be simeon. now they're trying to build a business in windows. it's also the low end phones. this is crucial. nokia was very powerful in india and particularly china in low end phones and that margin is just going away and they're losing share. let's talk about the challenges they face. media tech. second biggest phone chip set manufacturer behind qualcomm. about five years ago, four years ago came out with a chip set that armed a bunch of chinese manufacturers to make really cheap low end farms similar to what happened in the pc business. that has just eroded not only nokia's share at the low end but also their margins. now media tek recently purchased m star back in june. that was a competitor and allows them to focus r&d more on the mid range. they'll start to do to android phones at the mid end what they've done at the low end. you can think about what that will do for nokia's opportunities for this phone to expand into the mid range.
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it'll post some dangers. i want to talk to steven elop about that at the end of the 11:00 hour when we'll have him first on cnbc. then finally of course apple and samsung at the high end still going strong apple expected to have the iphone 5 out next week, carl. >> so, john, when we get this nokia phone in this hour of the program if i hold it in my hands, will i go wow? this is something i need? this is something i will buy? >> simon, you never know until you actually do hold it in your hands. so i am looking forward to that. you know i've got iphones and android phones i've held samsung's phone is a key one here. how does it feel compared to those? i've seen pictures but i can't tell you until i actually hold it. >> okay. john, we'll look forward to seeing you as you get those phones and of course with the ceo of nokia a little later on. we seem to have gone into
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another dimension where electrons travel more slowly in new york to get to john. >> i don't know the reflection on the lumia though. >> make that clear. no opinion on this phone. >> the euro. >> stocks actually have turned positive and we've been watching the euro tick higher to session highs. in fact just in the past few moments. there you have it. 126.16 right now on the euro. it is up by about 0.4%. >> one of the reasons the euro will be higher and i don't expect a lot of people to quite understand this is the leaks we've had as to what dragon will do. unlimited buying has been on the cards for five weeks. that was always going to be the case. they're saying now in these reports that it will be sterilized. so in other words when they create money supply by buying the bonds they mop up the money supply in another bit of the market. in other words, no increase in the money supply over all. if you're going to get the feds it's going to expand money supply here. that should shift the euro higher against the dollar and it should also have moved arguably the gold price down which is what you've also witnessed
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because you have less qe effectively in europe. it's a technical thing but is very important to the ecb which at the end of the day is usually more hawkish than the feds. >> right. >> still to come on the program -- michelle obama taking center stage at the dnc last night. we'll get some reaction to the first lady's big speech from the cofounder and former ceo of costco, jim senegal will join us on the program as he prepares to speak in charlotte tonight. at bank of america, we're continuing to lend and invest in communities across the country. whether it's supporting a delaware nonprofit that's providing training and employment opportunities, investing in the revitalization of a neighborhood in the bronx, or providing the financing to help a beloved san diego bakery expand, what's important to communities across the country is important to us. and we're proud to work with all of those who are creating a stronger future for everyone.
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breaking news from the democratic national convention in charlotte. we'll go to john harwood. >> the democrats have just announced that the thursday night speech by president obama accepting the democratic nomination which is the most important speech of the convention is being moved from the football stadium where they planned to this arena where i'm standing now where the other convention activities are being held. democrats had initially wanted to fill 65,000 seats to dramatize president obama's appeal the way they did at a football stadium in denver four years ago. not going to happen because of the weather. i can tell you it was pouring rain yesterday. we've got forecasts of more rain. the irony is that for all the talk of hurricane isaac in tampa the weather is actually worse here in charlotte, carl. >> interesting. you can hear the opposite side already blaming it on lack of enthusiasm or something like that. jokes about greek columns in denver. >> reporter: they could say that
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but they weren't getting soaked like i was last night going between the work space and the convention hall. this is authentically bad weather. it's been pouring in the evening each of the last couple days. >> all right. thanks for bringing us that, john harwood in charlotte, who was safely indoors as it now appears the president will be, too. >> back to the markets. the transports are trending lower this morning after fedex cut its profit outlook for the current quarter last night citing weakness within the global economy. so what does this mean for the sector as a whole? joining us now is jeff kaufman analyst at stern ag. he maintains a buy rating on the stock with a 1.20 price target. thanks for joining us. good morning. >> good morning everybody. >> jeff, am i right in thinking this is the second profit warning effectively we've had from fedex in about three months? >> well, i think the knee jerk reaction is to say this is a bellwether company saying things aren't good so therefore we sell. in this case i think there's a little something different to read into it. we know for a fact that
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retailers and businesses have not been restocking inventory for back to school the way they normally do so the -- what we call the peak shipping season build has been pretty lack luster. u.p.s. alluded to that last month. however, what we're seeing is retail sales were good last month. i just saw this morning theme park visitation, airline travel was very strong the past month. so we're talking down inventories. we're telling people not to read too negatively into this because two-thirds of the guidance reduction was the increase in fuel prices in the last five, six weeks. and fedex will recapture that through fuel surcharge which is on a two-month delay. i think the remaining third was a weak holiday shipping season but i've got leaner inventories, iphone 5 coming out, i got mini ipads coming out. i got samsung ipads or tablets coming out. >> sure. we have a lot of technology product that will need to be shipped this fall that wasn't shipped last year so in the case of fedex, i actually think that this is a buying opportunity on
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what we knew was already weak numbers. because we are going to see some stronger numbers this fall and we may see greater than expected air freight demand as retail store shelves become a little bit thinner. >> you see, there may be others who will look at fedex and say, actually, the story is more fundamental. as the environment plays out at the moment people aren't prepared to pay the premium to ship overnight in the way that they were unless they've already said there is mild restructuring with retiring some of the plans already to retire workers already bought out. actually they have to accelerate that restructuring and reform the business. the business may not be fit for purpose in the new normal in which we now live. >> i would actually argue that they're doing something they should have done five, six, seven years ago. overnight express has not grown since 2000. it didn't grow the whole decade of the 2000s. and what is significant about the fedex announcements, this is not a standard restructuring
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because oh, gee business isn't good this year. this is recognizing something that has changed over the last decade which is people just aren't shipping over night anymore. there is reliable, two day, three day options. we're seeing a lot of companies like dell make greater use of ocean freight to come out of southeast asia versus air freight. fedex was actually slow to recognize this and what we'll see at their analysts' meeting next month is a recognition and structural change. not because of china slowing down over the last 12 months but because the way people ship product has changed over the last decade and fedex is finally catching up to that reality. so we don't view it the same way you're alluding to although it's easy to take what they're saying and say oh, gee. things must be bad. >> well, we asked that question because if you take a look at shares of u.p.s. they're trading lower than fedex. fedex shares are seeing a nice bounce in today's session as the session progresses and people are digesting this forecast cut. so at this point in time when you see both of these stocks trading the way they are, which
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is your preference if you believe that what fedex is saying, half of it is fuel. so does that isolate it? >> u.p.s. is down for different reasons. >> yes. >> u.p.s. is in the process of doing a very large acquisition of tnt which is one of the largest express operators in europe. that acquisition has been slowed down by the european commission's investigation which we thought was going to be fourth quarter close. now it looks more like early next year close. so in u.p.s.'s case we've got disappointing news about the closing of a big acquisition. in fedex's case, really this was the anticipation by investors and i think that is why the stock is up on this news. we have a big restructuring that was probably a decade overdue that is going to be announced in the next month. we know inventories are getting leaner at retailers and we know that there is an awful lot of technology product launches coming this fall. so all together this isn't as bad as the headline might otherwise lead. >> i get it. i get it. a 120 price target is written large and we should note of
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course fedex hasn't performed terribly well so far year to date which is another reason why it's arguably not falling. jeff, thank you very much for your time. good to see everyone with breaking news on fedex. >> thank you. interesting. from transports to retail goldman hosting the annual retail conference today. several big name retailers in attendance the likes of nordstrom, jc pene, target and a lot more. for that we go to courtney reagan who has a review. >> they've already been there a couple hours and there seem to be a couple themes coming out. we still have 22 retailers to speak today. 25 tomorrow. one thing that seems very clear many of the retail ceos feel good about what the consumers are spending right now but going forward that uncertainty about the macro economic environment is really worrying a lot of the ceos. they don't exactly know how to forecast. as a result we're seeing very conservative guidance. political uncertainty. of course we have the conventions going on. the fiscal cliff could rattle consumers going into the holiday
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season. and multi channels becoming a very big focus from retailers for the likes of pvh to saks. the ceo, manny as he prefers to be called, made very interesting comments about just the first four days of its shop at izod o rolled out four days ago and he says they have already seen very strong sales strength. 80% of the stores or shops are open. 100% will be open by the end of the weekend. he looks forward to seeing what will go forward in the future and believes there is some positive momentum. and then as far as saks is concerned, the ceo making some comments about omni channel and being very important, making investments there, that that luxury consumer is very tied to what the market is doing right now. they need to make that experience seamless all the way around. back to you guys. >> all right. courtney reagan with the latest from the goldman saks retail conference. thank you. still to come we'll head to
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charlotte where we'll preview tonight's main event former president clinton getting set to speak this evening. cofounder and ceo of costco jim sinegal lays out his take on the dnc and clinton as he is also preparing to take the stage tonight. all energy development comes with some risk, but proven technologies allow natural gas producers to supply affordable, cleaner energy, while protecting our environment. across america, these technologies protect air - by monitoring air quality and reducing emissions... ...protect water - through conservation and self-contained recycling systems... ... and protect land - by reducing our footprint and respecting wildlife. america's natural gas... domestic, abundant, clean energy to power our lives... that's smarter power today.
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the euro higher this morning on reports the ecb will aflouns a bond buying program. let's get to the money in motion trade in chicago. always good to see you. >> thanks, melissa. >> walk us through. the important thing about this report that came out this morning about what ecb president draghi might or might not do is it sterilized bond buying and from what i hear from traders if it sterilized then that means the money action could contract. what is your interpretation? >> i think the first thing is it's risk on because they are providing more details so
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leading the market to believe they're going to act. that is important. but i also think that's why the market is getting to be disappointed tomorrow because i don't think the ecb will act tomorrow. there are two things that are key in what came out in that report. one is to sterilize bond buying but also in the little kind of known fact in there, it says that the ecb not only can sell or i'm sorry not only can buy the bonds but if a country does not meet the austerity criteria, they can turn around and sell those bonds. that is certainly something a country like ireland or portugal may want to think about before they go and ask for help from the ecb. so not necessarily all one way risk on with this announcement or this detail from the ecb this morning. >> so it sounds like you're looking to short into the ecb meeting saying you believe draghi will disappoint the markets. >> right. so we're just getting details and there is no action so basically the way this playbook sets up is if they do announce that they're going to go in and buy either irish debt or portugal debt or even spanish debt, that will be risk on. the market will love it
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initially and they'll definitely buy euros. if they don't announce any bond buying program which is what i believe i think the market is going to be slightly disappointed and overall the technical picture that the euro is setting up right now i just continue to like to sell euros. so my trade is just to sell around these, about 126.25, leave 100-point stock 127.25 looking for 300 points on the down side. for the risk averse you probably don't want to have a position on, i continue to like to sell euros on rallies. >> i think there is a very important point to make here. the ecb is not going to announce, there is no way the ecb tomorrow will announce it's buying bonds because draghi laid it out five weeks ago. spain and italy have to ask for a full bail out before there is an announcement on buying bonds. if anybody thinks that the ecb is going to announce they are buying bonds immediately tomorrow, they are crazy. they have not listened to what draghi has laid out all the way and what members of the ecb say time and time again. there will be no bond buying by the ecb tomorrow.
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that is a fact. >> well, simon, i think that is a great point but a fact as far as spain and italy are concerned because they haven't asked for full bailouts. greece, portugal, ireland have and ireland and portugal meet the criteria. so the ecb can step in and buy any time they want for those two countries but i think your point is broadly that, yes, spain is the big one out there. they haven't asked for it so they're not going to get it tomorrow. >> all right. we'll leave it there and see what the ecb does tomorrow morning. andy busch. catch money in motion every friday 5:30 p.m. eastern time. catch out currency class at money in motion.cnbc.com. >> one more point. another development today. the finance minister of germany did a radio interview in which he was asked whether the eurozone would be the same in a year's time and he said yes. so likely the germans are softening their stance on greece and suggesting it will not be kicked out of the euro. that is also very important. if you look at the greek market it is running strongly today. up next on the program it's the moment we've been waiting for in
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cnbc right after the break back to the dnc in charlotte for a live interview with costco cofounder and former ceo jim sinegal. that's next on cnbc. this country was built by working people. the economy needs manufacturing. machines, tools, people making stuff. companies have to invest in making things. infrastructure, construction, production. we need it now more than ever. chevron's putting more than $8 billion dollars back in the u.s. economy this year.
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president obama is getting help defending his economic record and policies toward small business from a major player in the corporate world. costco cofounder and be former ceo jim sinegal will address the
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dnc tonight and joins us now in a first on cnbc interview from charlotte. great to have you. good morning to you. >> good morning. >> i hate to have you give away your best stuff. i know you want to save the good stuff for primetime. in a nutshell, what do you expect to say tonight? what is your message? >> the message is i think that things that president obama has started are beginning to take hold. i think that, excuse me, a lot of noise here. i think the things he started have started to take hold. i think when you look at where he started and what the conditions were at that time and ask yourself are we better off today? i think the answer is yes. and i think he is very supportive of business and certainly we found that to be true relative to our business. >> i know it hasn't been that long since you've been in the corner office at costco. you stepped down not too long ago. i'm sure you have your finger on the pulse of what consumers are feeling, what your vendors are feeling. it won't surprise you to hear us
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say we talked to small business owners who don't believe they're better off. that taxes, regulation, uncertainty from this white house has made business more difficult. what do you say to that? >> well, i disagree. certainly a reflection of our business has been that business has been a little bit better and has been increasing as time goes on. there are lulls, unquestionably lulls. but there have been improvement in jobs, a build up and increase in the private sector in jobs. i think 29 months in a row that is progress when you consider that in 2008 we had already lost 4 million jobs. so it's slow, a slow process, but i do believe it's coming around. >> a lot of discussion about what he's going to say on thursday night. what kind of vision he lays out for the next four years. he's already said that he expects policy to be a little bit easier to do in a second term but we're not really sure what his major policy initiative will be. does it involve climate change?
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does it involve education? maybe something about broken capitalism as a columnist said earlier this week. what do you think his mission should be if he is re-elected? >> well, certainly you hit on a couple of the key issues right there. education is one. a more refined energy system in our country, energy efficiency. i think those are all very important things and then of course some things to continue to spur on the economy. and i believe it will be easier to get things, i think a more collaborative spirit in washington once president obama is elected. >> mr. sinegal, if president obama has succeeded at the moment why do you think we've now reached a record number of people on foodstamps, 46.7 million people? >> well, i think that, you know, it's been an ongoing process with foodstamps. i think perhaps a lot more
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people are aware of the program and the help that's available to them. i haven't seen the statistics that you're talking about. but i believe that's probably an ongoing wave of what happened and what has been transpiring over the last four years. >> jim, the costco audience is largely our audience, average income tends to be around $100,000. a large percentage of your consumers may see their taxes go up starting next year. do you think that is dependent on whether or not mitt romney or the president is elected? what do you say to people who say i would vote for obama if i didn't think my taxes would go higher? >> well, you know, i think there's going to be a lot of conversation that's going to go on between, and a collaborative process that is going to go on to determine how the revenues are increased. i don't think there is any question most people believe, not everyone obviously, but most people believe there has to be a combination of cuts and revenue
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increases. and it will be interesting to see where those increases come from. some people have indicated they'll be in tax breaks. others have indicated that it would be people at the top end of the scale paying more taxes. i'm not so sure where it's going to come from. i really don't believe it's going to wind up hitting the middle class however. >> would you acknowledge that the stock market, the way we cover it down here at the big board, would prefer a romney presiden presidenc presidency? just on share prices alone a lot of people believe the s&p would rally on a romney victory and maybe suffer on an obama victory. >> i disagree with that. i think that an obama victory will keep the market steady and i think it will continue. i think you have to look at the market conditions on a longer term basis than just a couple weeks after the election. i would disagree. >> spoken like a true long-term vision ceo. would you be giving this speech tonight if you were still ceo,
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an active executive at the company? >> i don't know. you know, i think as a business person i don't have to advocate my citizenship -- i don't have to abdicate my citizenship. it's an interesting question. i don't have to make the decision from that vantage point but i think perhaps i might. >> yeah. we were talking with cramer earlier this hour about the way you pay your employees. it's generous relative to the rest of the industry. if everyone paid their employees the way costco does we might not have a debate about health care in this country. but that said, i'm sure you have run some numbers as to what obama care will cost costco over the next 10 to 15 years. i assume it's an ink krecrement increase in costs no? >> there will be an incremental increase in costs but we think it's something we can live with and that we can adjust to. but we're -- we already have a very rich plan that you alluded
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to just a few seconds ago. so it's not going to be a significant hit for us. >> final question here, jim. separate from politics we've been watching the comps out of costco lately. i know you're not running the ship day to day. but august was good. the rest of the summer not so good. what do you see for the fall? >> well, you know, at the moment we're reasonably optimistic for the fall and talking to people over at the home office there we think that we're going to have a reasonably good fall. we were pleased with the august numbers and in truth if you look back over the past six or seven months the comps have been pretty good on a consistent basis. i think for our fiscal year, which is going to end this month, it just ended this past week, i think the comps on an overall basis were about 7%. that's not so bad. >> jim, look forward to seeing you tonight. enjoy your spot on primetime. thanks very much for coming on. appreciate it very much. >> thank you, carl. >> jim sinegal cofounder, former
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ceo of costco joining us tonight in charlotte. speaks just after 10:00 p.m. eastern time in primetime. >> all right. m & a activity ticking up ever so slightly this summer but still no big ticket deals crossing the finish line. what is in store for the rest of 2012? david faber will sit down with citi's cohead of global mergers and acquisitions mark shaf ir next. about options trading. we create easy-to-use, powerful trading tools for all. look at these streaming charts! they're totally customizable and they let you visualize what might happen next. that's genius! we knew you needed a platform that could really help you elevate your trading. so we built it. chances of making this? it's a lot easier to find out if a trade is potentially profitable. just use our trade & probability calculator and there it is. for all the reasons you trade options - from income to risk management to diversification - you'll have the tools to get it done. strategies. chains. positions. we put 'em all on one screen! could we make placing a trade any easier? mmmm...could we?
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mergers and acquisitions have done little more than trickle down the pipe line this year and with few large transactions crossing the finish like global merger and acquisition activity down 15% versus the same time last year. not the rebound many bankers hoped for and investors as well when the year began. mark shafir is cohead of global mergers and acquisitions at citi and joins us to talk about what
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we can expect for the rest of this year. you joined us back in april. and i have to say bankers typically you're taught in banker school to be optimistic but you weren't. you were somewhat glum. here you are. you were right to have been perhaps. we've seen a bit but are you any more optimistic at the end of the summer before it started? >> not particularly so. maybe a little. we had a pretty good run between may and june. volume has picked up. august was pretty low. but i don't think, i don't think things have fundamentally changed, david. that is the biggest issue at this point that don't see a catalyst. we've got problems in europe. we got a major, a presidential election in the united states. so all of these are factors that go to risk preference on behalf of boards and ceos. >> and just keep them from doing deals? >> correct. >> especially large deals. i think this year the absence of the large transaction, and by that i mean one perhaps above $so billi $10 billion has been notable. >> it has. the statistics, we were just looking yesterday, 33
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transactions this year north of 5 billion. the lowest year to date since 2004 which does tell you something about the health of the market. >> wow. >> other things we look at, things like concentration, both regionally and by industry so 50% of the market from industry perspective has been industrial, consumer, and energy. and six countries make up 70% of the billion dollar plus transactions. the uk, u.s., germany, china. >> so much for the emerging market strategy so many of these, you know, including citi of course big on emerging markets. it is not making a dent this year? >> look. it's -- the reason i raise concentration is generally in a really healthy market all industries, all regions general performing well. when you get this kind of concentration it suggests the market is spottier and that is what we feel right now. the china outbound deals from china and japan have been pretty good, pretty strong, japan in particular. and that's, you know, one of the bright spots in the market. sponsored deals in the last, since may, it's been the biggest
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period of $1 billion plus in terms of the last few years. starting to see some bright spots. >> they seem to be more of that type, 2 billion. they don't really make the headlines but there is something. >> true. >> it's not nothing. >> that is the point. do i really feel better than april? not much. i feel a little bit better but not in any really material way. >> it wouldn't seem though given the election of course is looming and what are you hearing in board rooms at this point, are there conversations that are just not going anywhere? is that more typical? >> look. i think there are conversations going on. the issue really is can you then get management in the board to come together and say this is the thing we should do and we should do it now or should we put it off, wait for greater certainty? and so i think that is the kind of environment we're in and are likely to be through the end of the year short of some major catalyst. >> what about activism? we've seen it very large cases. ackman and p & g.
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that generates some business for the m & a guys doesn't it? >> well look. it's definitely on the upswing and size is not a factor anymore. >> is that a surprise to you? >> not necessarily. we've seen changes in some of the proxy rules. we've also seen just they have a tremendous -- they have funds available. if you got a stock that hasn't performed you're sitting on a lot of cash, a lot of companies put their balance sheets in very strong cash positions, a little leverage you'll be a target. arguably maybe you should be. just given the fact that, you know, sitting on a boatload of capital and not earning anything like your hurdle rate then you are going to be potentially the subject of this kind of activity. so that is an area, yes, we could see activity. we'll see more of it so ceos and cfos and boards have to be wary. >> what is going to change this dynamic which by the way has been in force for years. we really came in expecting seeing enough to win things.
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the economy was stronger in the first quarter than for much of the rest of the year so far. is it going to take that once the election is out of the way? can we start to build a case that, hey, 2013 is going to be the year or is it just going to be more of the same? >> look, we correlated to a number of things one of which clearly, you know, gdp does factor, over all economic health. the three things we tend to look at, interestingly enough of all, rebounded very nicely since october. consumer confidence, the s&p 500, and as i've talked before correlation and vix. they're all up since october substantially. the m & a market is not. some of the traditional things we correlate to are not necessarily correlating right now which is not great. the economy is what it is. >> you hit your big points. cash at all time highs. stock prices. you know, i -- >> how many times can i say that? >> right. acquired stocks going up. doesn't seem to resonate. >> not now. not at the moment. >> mark shafir we'll bring you back for an upbeat assessment one of these days. >> can't wait.
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>> all right. mark shafir cohead of global m & a. all right. >> thank you very much. ahead on the program the big nokia reveal. does nokia's new phone have the wild factor? you'll see it first on cnbc. we'll tell you how the latest smart phone stacks up against the competition. the cfo will join us later. stay with us. for fastidious libn emily skinner, each day was fueled by thorough preparation for events to come. well somewhere along the way, emily went right on living. but you see, with the help of her raymond james financial advisor, she had planned for every eventuality. ...which meant she continued to have the means to live on... ...even at the ripe old age of 187. life well planned. see what a raymond james advisor can do for you.
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breaking news here. nokia unveiling a brand new smart phone this morning the lumia 920 which features microsoft's latest operating platform and has a built in wireless charging feature. can this device be a game changer for this company? john? >> now, this phone is definitely a little different than everything else we've got out in the market now. nokia really trying to focus this on going places and having experiences and capturing them. i want to break down what that's about. nokia has navigation technology that is top notch in terms of what they've been able to put together. they've built it into the phone. they're trying to tout clear black in the display which means when you look at this display in bright sun light it should perform better than some of the competitors. another feature they've got is camera. pure view hd plus.
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they claim that this display is bigger than 4 inches and will have better than hd resolution, that the camera at 8 megapicks ls with the software will actually capture more light and provide better images and video. they're trying to position this specifically as that sort of device so people know how it is different from ios and android. one thing they did not announce -- one other thing they did is wireless charging. kind of cool. not sure how practical but we'll see. one thing they did not announce is availability date for this phone the luem ya 920. that could be key because next week apple will introduce the iphone 5. we expect to see that available just within a few days. if nokia waits too long they could lose a bit of their window to capture attention. back to you. >> john, thank you very much. of course on the back of the big unveil we'll be joined by the company's ceo with his take on the new product, the state of the company, perhaps stock price today with the shares down some 12% and a lot more today at 11:45 a.m. eastern time. i'm freaking out man.
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but proven technologies allow natural gas producers
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to supply affordable, cleaner energy, while protecting our environment. across america, these technologies protect air - by monitoring air quality and reducing emissions... ...protect water - through conservation and self-contained recycling systems... ... and protect land - by reducing our footprint and respecting wildlife. america's natural gas... domestic, abundant, clean energy to power our lives... that's smarter power today. want to bring your attention to an earthquake off the coast of costa rica a big one 7.9. 98 miles off the coast or from san jose. there is now a caribbean wide
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tsunami watch that includes everything from mexico to ecuador to guatemala to peru. again, 7.9. we'll look for any effects of that later on this morning as well. >> all right. we are just two days away from the big august jobs report. otherwise known as another opportunity for you to nail the number. so tweet us your predictions for the august nonfarm payrolls figure. hit us up at cnbc squawk st hash tag nail the number and perhaps, perhaps if you're lucky enough to get the winning entry you can get the tote bag signed by all of us including david faber who is signing it live right now. >> that is very useful. the signature he uses for his checks. so if you do win this. >> you can trace it. >> the prospect is huge. >> yes. >> potentially enormous. i have at least $10.87. >> i've got less so here i go. >> it's an exciting moment in television history. >> it is. an action shot. you should see what is inside the tote bag. >> i never tire of watching carl's hands. look at those fingers.
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>> wow. >> we got to get this to santelli and kaminsky in the next couple days. >> yes we do. >> we'll send it fedex, express. >> we need to do it express because it's friday's jobs report. >> exactly. true. >> all right. what's coming up tonight? >> we are going to talk to adam parker of morgan stanley and see where he is seeing the markets in terms of year end and also get a back-to-school retail check with a channel checker. so he has been hitting the ground, you know, seeing what is selling and what is not. he'll tell us which stocks to buy and which to sell. >> all right. we'll see you tonight. simon, see you in a few minutes. the european close, david, see you later. >> yes, sir. >> here is what you missed earlier this morning if you're just joining us. >> welcome to hour three of "squawk on the street." here's what's happening so far. >> the argument is going to be, whose side are you on? who is fighting for the middle class and who is fighting for the few? who is for tax cuts for the wealthy and who is for tax cuts for the middle class? >> i think you should look at me
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and say, you did a great job. and if you look at our numbers over the past decade which is the way we should manage companies, we've done a spectacular job and i'm proud of the record. >> there are two ways people are playing this market. the hedge funds are either saying okay, look. we have to play, the relief when the ecb does the right thing and another hope, listen, we have to get back to dividend stocks. we need the safety. there are a lot of shares here. this is a drop in the bucket and people are covering today, people are going to now be thinking maybe they've got something up their sleeve. maybe they're going to announce something. but look. you want to announce something on facebook go by twitter. >> the opening bell this morning. >> historically facebook has been a company that's kind of slow as they can in terms of monetizing the site with advertising. that is clearly changed and this is quickly turning into an advertising company rather than an engineering driven, product focused, user first company.
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>> i think the things he started have started to take hold. when you look at where he started and what the conditions were at that time and ask yourself are we better off today i think the answer is yes. >> good wednesday morning. live here at the new york stock exchange. want to check on the markets today which started in the red. we climbed about 45 points on the dow. now settling out with a mixed market at this hour. dow is up almost 9 after the fedex warning of course last night still weighing some comments and reported comments from mario draghi of the ecb. s&p down 2 points and nasdaq down 7. safeway one of the biggest gainers on the s&p after the supermarket did say it plans to offer a minority stake in its gift cards unit through an ipo. safeway says it will execute the potential ipo in the first half of next year depending on the market. and netflix one of today's biggest losers extending losses from yesterday's session after news that many of the company's streaming movies will soon be available on amazon's service. let's get to the road map this
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morning. facebook getting a pop today thanks to the man in charge. mark zuckerberg says he will not sell any of his shares of company stock for at least a year. but is it enough to turn the stock around? plus it's day two of the dnc in charlotte. we'll take you there live, check on the issues everyone is talking about and a preview of the big speakers taking the stage tonight. then the apple tv isn't even real yet but people already showing some interest in buying it. we have the results of a new survey that's revealing just how big of an effect apple has on consumers. a little later the ceo of nokia will join us live to talk about the company's new products and how it hopes to revamp its image in the mobile phone market though the stock is down today. that's coming up in the next hour. we'll start with facebook. getting a pop in today's session according to an s.e.c. filing mark zuckerberg says he will not sell any of his shares for at least a year. julia boorstin is live in los angeles with more details. >> reporter: this is clearly a move to reassure investors and
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based on wall street and analysts' reactions so far it seems to be working helping bolster the stock after it hit yet another all time low yesterday. now we have to keep in mind that ceo mark zuckerberg is not just ceo but also the company's largest share holder. the filing says he won't sell any shares or options for at least 12 months and currently he has no plans to sell beyond that. though the filing also discloses that directors will sell shares, they're only doing so in order to cover taxes with no other plans to sell. this of course is a stark contrast to early investor peter teal's sale of most of his shares. another boost for the stock. the company explained it will take 101 million shares out of circulation as it covers taxes for its employees at restricted stock units. that will function just like a stock buy back of just under 4% of the company's shares. now many analysts are calling this news a mild positive saying that the fact that zuckerberg isn't selling shouldn't really be a surprise but that the fact
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that the number of shares is being reduced will help the stock as it heads into the series of lock up expirations. the next of those expirations will actually be coming earlier than expected. the company announcing yesterday that it will allow some employees to sell their shares two weeks earlier than expected on october 29th. that'll be just a few days after facebook's next earnings announcement which has been scheduled now for october 23rd. a lot is going to hinge on those earnings especially considering the fact that the biggest expiration, lock up expiration is going to be coming just a couple weeks after that. 3/4 of a billion shares are going to be available to sell in mid november so a lot of people are going to be waiting to see how fast facebook can accelerate its growth in those october 23rd earnings. carl? >> so much information, julia. thank you very much. julia boorstin in los angeles. our capital markets editor gary kaminsky has been talking facebook for a few days now. mostly the phrase you've been repeating, gary, is stock for
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sale? >> yeah. carl, with apologies to my mother because she'll be mad i promised back on july 30th we weren't going to be talking about facebook anymore. you know what? >> how can you not? >> it just keeps airing. a lot of it has to do with the size of the transaction but also the huge exposure that this ipo, depending on what side of the table you were on got. i want to go back to a discussion in late july. i want to remind viewers of something we talked about after the report of the first quarter. let's play the tape on july 30th. thanks. >> the job of an investment banker is to make certain when you price a deal you are going to create a level where you give, deliver the type of expectations where you surprise on the up side. you want to under promise and over deliver on that first quarter. so no opinions here. these are just the numbers. you want a confirmation that the price has over priced the
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facebook deal? guess what? the facebook deal was way over priced. >> now the reason i wanted to bring that up, carl, you and i talked about this off camera yesterday. on that day i had asked one of these quantitative analysts to run the black box numbers and say if google was worth a certain amount, what would facebook have been worth going back again using those metrics? i didn't feel comfortable that day essentially saying what the stat off number was. in other words when would the machines start to buy facebook? the answer that day was $14 a share. again, this is no emotions, no subjective thinking just simply the numbers. as we got down to the levels yesterday it was $14 a share that the machines would look to buy that stock. i also want to remind people you've seen this chart. bring up the pyramid, inverted pyramid of what you want to see growth companies do with free cash flow. you know that, no, that's global announced m & a. we want to take a look again. if you know cash is obviously the worst thing to do, if you
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take a look here m & a, buy backs, dividends, organic growth. if you've been watching this program over the last year and have seen this chart you know growth investors want to see growth and if they don't get growth they want to see capital returns in the form of dividends. memo to cheryl sandberg here the buying back of stock using proceeds is probably the worst thing to do other than doing nothing. you don't want to try to attract the theoretical long-term investors at this level, carl, that you want by announcing a buy back. it may sound good on paper for the day. not long term. >> because why? because buy backs tend to suggest they've run out of ideas? every headline this morning has been take some float off the table. you'll pick the stock up. >> because longer term those that will give this a multiple and want to be in a grow, a business that's growing want to see them grow the business organically and if they can't redeploy that capital into growing organically then go out and buy somebody. obviously a dividend at this
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stage would be a bad idea for face book. but going and buying back stock as opposed to buying somebody is not what share holder base they are trying to attract here wants to see them do. >> no. good stuff, gary. we'll talk more later on this hour. meantime getting news on the obama campaign. rahm emanuel announcing minutes ago he is quitting the campaign to raise super pac funds. our chief washington correspondent john harwood is live in charlotte with more. john, this had been telegrafd to some degree. right? >> yes. it is only one of two pieces of news we've got this morning. the other one is the move from obama's speech from the bank of america stadium. large football field, 65,000 seats into this arena where i'm standing right now where less than half that many people can be accommodated. democrats got soaked last night walking a couple blocks from their hotels to this arena. they didn't want to take the chance of having their event over shadowed, wrecked by a rain storm, thunderstorm perhaps. the rahm emanuel news is
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interesting because democrats have been having trouble raising super pac funds to compete with the republican super pacs so rahm emanuel left his role as a chairman of the obama campaign mostly ceremonial to do some of the hard work of raising money. rahm emanuel has been very good at that for a long time. he was a top fundraiser for bill clinton in 1992. as for what happened last night of course we had michelle obama making the case for her husband and by all accounts republicans and democrats she had a very effective speech. part of it was rebutting mitt romney without even mentioning his name, that is because she told the story of her family coming up by the boot straps and making the case that president obama sees money making as not the goal in life but in fact how many people you can help. here is michelle obama. >> and he is the same man who started his career by turning down high paying jobs and instead working in struggling neighborhoods where a steel
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plant had shut down, fighting to rebuild those communities and get folks back to work because for barack success isn't about how much money you make. it's about the difference you make in people's lives. >> now, what michelle obama was trying to do in that is appeal to the aspiring voters in the democratic coalition, blacks, hispanics, working women, especially blue collar women, white women. tonight bill clinton is going to try to make that case as well. nobody in american politics has more credibility on the economy, carl, than bill clinton after his stewardship in the 1990s. he is going to deploy that on behalf of the president who defeated his wife in a primary four years ago. >> and as you pointed out in your column this morning, john, clinton's mission, if michelle's mission was to appeal to minorities, per se, clinton's mission will be to reach out to white men specifically, right? >> white men and white women. you've got white voters,
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generally, are the overwhelming target of the romney campaign because obama has got so much support among african-americans and hispanics. women are a relative advantage for democrats but there are blue collar women, noncollege women who are key targets for obama as well as men across the economic spectrum and bill clinton did fairly well although he lost white men to republicans just like president obama did. he has a track record on the economy they hope can help him. >> going to be interesting to watch, john. thanks for bringing us two big pieces of news today. meanwhile earlier in the last hour we told you about a plague any t a magnitude 7.9 earthquake off costa rica. it has been downgraded to a 7.6 by the usgs and a caribbean wide tsunami watch issued just after the quake has been canceled. the quake was centered 98 miles from the capital city of san jose. let's get to the cme this morning. rick santelli with the wednesday
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edition of the santelli exchange. i know you were watching the debt clock yesterday. 16 trillion. >> i was. you know, it's funny because this week i spent a little time being on vacation with the family at disney world. and about the time i was hearing about a 16 trillion cross to the debt clock i was also hearing a commercial in my ears throughout the park. the commercial was about the new movie "finding nemo 2" i guess is going to come out. what i found fascinating was one of the lines in the commercial. it said something like this. it's very difficult to find one fish out of the 3.7 trillion in the sea. so i tried to really do some research to see if anybody could quantify that there are 3.7 trillion fish in the sea because it seems really low to me. i didn't have a very good time of really researcher that and telling you whether or not it's true but you see where i'm going with this. we crossed the 16 trillion. 12 zeros as carl pointed out. so whether there are 3.7
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trillion fish in the ocean or not here are some facts to try to put a handle just on 1 trillion. okay? if you spent $1 every second it would take you 31,546 years just to reach $1 trillion. that's just one. what is this number? well, if i looked at what year it was, 1 trillion days ago t. would roughly be 2.739 billion with a "b" b.c. here's what i really found fascinating. this is how much money you'd have to make, $480 million an hour if you worked 40 hours a week to have $1 trillion after one year. $480 million an hour. this one very fascinating. 1 trillion pounds. if you took everybody on the planet and put them on a giant
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scale probably outside some major weight watchers office, we'd weigh about a trillion pounds. last but not least i've never been to china but the great chinese wall, well, if you had one trillion bricks, one trillion bricks, you could make that 258 times. now at the top of this i heard the first lady who gave a rousing, great speech, boot straps, my kind of material, but she said money isn't important. in the context of her speech i understand that. and i agree. but you know what? somebody has to find money important because where i come from, that's important. back to you. >> great, great stuff, rick. wow. that is some head turners there. we'll come back a little later. rick santelli in chicago. let's get to brian sullivan and the market flash desk. >> all right, carl. going to be hard to follow up on that one. that's quintanilla right there. let's get to yelp. yelp actually a couple things
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here. the ceo of yelp giving positive comments about mobile ads. that is all everybody is concerned about with facebook. well, the ceo of yelp making positive comments at a conference about their mobile ad strategy saying we expect to see growth in that business. the other thing, too, about yelp that's interesting is you've got the lock ups coming out but the stock is up about 20% since the lock ups and trader chatter going around that maybe there is not going to be a lot of internal selling perhaps out there. so yelp shares bucking the trend with the lock ups rising primarily on the ceo comments about mobile ad growth. >> all right. good stuff. thanks very much. when we come back this morning one thing is for sure about apple. their fans are loyal and there is new data showing loyalty would apply to an apple television. what if you don't use apple products? we have all the details on the new survey after a break.
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from iphones to ipads apple products are everywhere and with an apple tv rumored to be in the works even nonapple owners are taking notice. according to a new survey 80% of owners of a flat panel
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television say they would be interested in an apple tv. 88% of apple owners said they'd buy an apple television. tamron pratt is president and lead researcher of the survey. welcome to "squawk on the street." good to have you. >> nice to be here. >> walk me through some of the findings that you've got, the method oggology, margin of error. where are you getting these numbers? >> this is a broad based survey. we had heard a lot of information about apple itv coming out in the market place from the industry where we work and we decided we really wanted to hear what consumers had to say about a potential apple i-tv. we surveyed 1200 consumers. it was very broad based from 18 years and up. they all had to own at least one flat panel tv to use as their primary television. we had a very broad based survey. >>amazing is the spread between those who have apple products and those who don't
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isn't very broad. >> that was very surprising. 80% of the -- sorry -- 70% of the people surveyed actually owned an apple product meaning they were from an iphone to tablet, pc computer, etcetera. and those people and the nonowners were very excited about an apple itv versus we thought there may not be as much interest in an apple itv. >> yeah. features, i mean, when we're talking about features of the potential apple tv product most owners according to your numbers wanted to see wi-fi, cloud storage came in second, and syncing third. least interesting things like siri which i guess given sort of the checkered past she has already had in her brief history is not too surprising right? >> well, not too surprising but what was interesting is those are all typical features of apple products. there is a disconnect between what is currently a connected tv and what the mobile device users
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are using right now. and the people that want an i-tv and people that want a connected tv want what you just talked about, wireless connectivity, cloud storage, syncing with their devices. the other features while they may be nice our research showed were really not top features. that these consumers wanted for anyone. apple owners as well as nonapple owners. >> yeah. interestingly gesture control and 3d. i remember when people were talking about 3d as the future of television screens. it's just not a draw for consumers at least not at this point. >> no it's not. it came really close to the bottom with mobility as well as i use the speech recognition. >> i guess it's unfair to ask you if in fact when apple tv does become a reality what it needs to be, what it needs to look like. but after having done the survey you must have some ideas about what apple has to do to make it a breakthrough product right? to make it not just another
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incremental product they might get somewhere else? >> well, i think that was one of the interesting findings is that the legion of apple owners that are currently out there are really ready for an apple itv to be a lot like their apple phone. and they want all of those devices to connect together so that they have an easy-to-use product where they can move their content back and forth from their tv to one of whatever their mobile device might be and really capitalize on the apple features. >> yeah. i mean we've talked so long about the living room being the center of your universe, but increasingly at least from your survey it looks like the idea that your television screen at home will be your primary device, right, and you might have a second screen but it's all going to funnel into the big one in the living room. >> we definitely saw that the tv is still the gateway to the home. there will be 35 million tvs sold this year and people still want to watch their tv. right now they are using -- 80%
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of the people we surveyed do use a second screen. they're just not connecting that second screen to the tv. they're doing other things while they're watching their tv. so that's really where the disconnect is and that's what the research showed us that they want to connect. they just don't have the ability to really do that right now in an easy way. >> yeah. sounds like my household. interesting stuff. thanks so much for your time. >> thank you. >> the president of the research quixel. we have six and a half minutes to go to the close in europe. talk about all the news out of that couldn't tent after a quick break.
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bells are about to sound across europe. what a day over there with some the reported headlines out of the ecb.
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a big meeting taking shape tomorrow. we'll get the close and details on the impact in the states this afternoon right after a break. ♪
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you'll hear us talk a lot about unsterilized, sterilized over the next 12 or 24 hours. we're not talking about how clean things are. it has more to do with monetary supply and interesting to watch when the meeting happens tomorrow. >> finally of course what carl is referring to the president of the ecb mario draghi tomorrow
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8:30 new york time will detail where he is exactly on doing everything that was required to save the euro. it is going to be presumably about bond purchases and will move the markets. europe now positioned basically for that. >> the european markets are closing now. >> in fairness they have a couple hours to trade before draghi gets up and you get the statement and the news conference. we're higher on the session over all. of course a huge amount of noise is now entering the market, leaks as to what might or might not be said. a lot of attention earlier today on the fact it would be unlimited bond purchases, sterilized in other words, they will mop up the money supply they create. unlimited bond purchases is obvious. it's so blindingly obvious that that would be the promise. that's the point of it. that's the whole point of buying the bonds. it's an unlimited potentially form of buying and therefore of course if you make that promise with deep pockets hopefully you don't have to buy too many. we knew it was coming. what is interesting is the fact
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the market really didn't react very much to that. if you look at germany, spain, or italy it wasn't, that report wasn't a real great mover. what i think is more significant actually is what is coming out from reuters, a suggestion that the ecb will waive its seniority status on government bonds. again, draghi said five weeks ago they might think about doing that. if they do that it means the ecb in the event of restructuring will not demand it is paid first before other private shareholders or investors. that is important because it means it is less risky at the margin to buy now spanish and italian bonds. and further out the curve that is exactly what you've seen. take a look at where we are on the ten year here in italy. you've seen quite a sharp move down. this is further up, this is not where the ecb will be buying the secondary market. this is a broader promise about restructuring down the line. you also see it incidentally in spain at the ten year. there you can see we've come down. actually spanish short term yields have risen very slightly. you get the point.
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that has important implications because if they're going to make that rule where does it leave greece with all the greek debt the ecb now holds? arguably they may, and this is me speculating, they may say to greece we will take a hair cut on the greek debt. interestingly, the prime minister of greece is now going to see mario draghi on tuesday. has also happened importantly for greece today is that the finance minister of germany did a radio interview in which he was asked do you think the eurozone will look the same as it is with 17 members in a year? he said yes. in other words, they are not talking about in germany now that greece will be kicked out of the eurozone in the next 6 or 12 months so germany is softening its attitude. have a look at where we are on the greek stock market today and you will see a very clear out performance there again of 3.5%. i've looked at some of the big greek stocks and how they have traded today. again you will see they are higher. we move this on. thank you very much. gains there are 5.74% as you can
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see and the banks in greece importantly which is sitting on a lot of greek debt, would be helpful if the ecb were to voluntarily give up some of that. that is me speculating not necessarily where we are on any official comment. you see the greek banks have gained. the other thing i should mention is that there was a german auction today of 3.6 billion euros which went very badly partly because the safe haven appeal of german bonds are perhaps not where they were because you're anticipating you're going to make it safer to be in spain and italy tomorrow depending on what draghi actually says. >> what do you make of the anecdotal reports that companies, various companies are making plans to get funds into greece if in fact the walls go up, right? if in fact it is excluded? >> if it's kicked out of the eurozone. >> yeah. >> you know, this is one thing i find really irritating. it's like when they say the german civil servants are working on what they will do if greece is kicked out of the
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eurozone. if you are a ceo or running a country your job is to have contingency plans. that's what you send people to do. you go, well look. this is a risk but you have to go out and prepare for it. what would we do? i haven't seen specifically what you've got but you should always bear it in mind just because an exchange is thinking it might do something is totally irrelevant as to where you are actually going. >> better to be prepared. simon hobbs, thanks. over to chicago to check in with rick santelli and ira harris. hey, guys. >> hi. we all are familiar with that play waiting for goodo and we'll talk about how maybe extending and buying time is really what is at the epicenter of many of the issues we've been discussing regarding europe but i say name the change of the play to waiting for god's dough. >> there are so many leaks and they aren't by mistake. he wants to see what floats and what he floated yesterday worked because we saw that dramatic move in the two-year especially
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spanish and italian and more importantly in steepening the curve because, again, what is the conversation today even with merkel that they want to keep this program not on the long end, not the ten years but within that three-year window. in fact, draghi made a comment last night or yesterday which i found amazing. he said that if you do this in the short term, there is really no big monetary impact because all that stuff will roll off anyway. i found that kind of funny and when i said it, i said three years in our world, rick, and in the financial world is a long time. and to think, well it's not really a monetary phenomenon because it is going to roll off, not so sure about that. >> all right. let's keep it simple for viewers. there are really two issues here. one is saving the euro as a currency. the other is the insolvency in the financial system in europe. let's take the latter. is the financial insolvency going to be fixed by the short-term liquidity programs? >> no which is why you get the push/pull on the currency. if you're short in euro currency
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because you fear for its existence then anything that they buy, do to buy themselves time forces those shorts out of the market. >> hence the six-week high on the euro currency. >> correct. anything that bodes well for the continuing of the euro and taking it out of that stress plan. the other point is that the solvency people, people who know that this is opening to a solvency issue they want to be short the euro because the ultimate thing, the question of solvency is a big matter but they get run in on the short term. you have this push pull between again existence of the currency versus the solvency issue. >> we'll find out tomorrow morning. let's give them the benefit of the doubt. >> see what they say. let's bring in bob pisani here at post 9 who also makes the point that we are kind of marking time here. >> yes. >> until we get firm headlines. >> very much a holding pattern. exactly even on the advance/decline line. if you look at the markets there's not a lot of pattern to
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the buying. normally you can discern very clear patterns. this is a lot of random noise. take a look at the sectors. this is where you want to go to see what is going aggressively. when you see telecom and materials both up exactly the same amount on the day, that's a little bit of randomness. they don't normally move in that area. technology is up. industrials are down. normally industrials and materials for example also will move in the same direction. they're not. this is just a lot of floating around right now. if you look at the vix curve people wondering has the volatility increased? are there more worries? not really. the curve has been in -- if you go further out into november and into january on the vix you're paying considerably more for risk as you go out. but this has been the case for months now. i could have gone, taken this back three months and shown you the vix curve was very low. the front end here. the spot was low. and you're paying higher prices going out into august and september. in other words, the steepness of this curve hasn't changed that much in the last several months. it doesn't mean that the vix is
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necessarily going to be 25 in january. it could be back at 15. just means right now that's what they're charging you if you want to get protection. now let me just go on to talk about the ecb. we're in this holding pattern because of the ecb. here are my thoughts. simon had a very good point. i think there is not going to be a bond buying program announced and it is very simple why. driving has told us what is necessary for a bond buying program. on august 2nd this is the statement draghi made. the adherence of governments to their commitments and the fulfillment by the efsf/esm of their role are necessary conditions. wait a minute. there is no commitments. italy and spain have not applied for anything. therefore there is no commitment. secondly, the fulfillment by the efsf/esm of their role? there is no esm. it is not in existence. we're waiting for the german constitutional court to rule on it. the two conditions, draghi told us last month are necessary for a bond buying program do not exist yet. that's why there's not going to be a bond buying program
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announced. here is what i think will happen. he'll announce details of what the program might look like. that's why this phrase unlimited is very interesting and sterilized. it's sterilized, carl, i think it is going to be a disappointment. it is not inflationary, not ex-pantding the money supply. that will be a disappointment. you might get a rate cut, lower economic forecast. they'll tell you inflation is subdued. most likely, collateral rules are going to be relaxed and finally you might get into lending facilities but i think it is unlikely. they announced them december 1, announced another one in february. i think it is a little early. the collateral rules, the most likely. >> right. as you've laid it out would the markets see that as a disappointment or ready for that? >> the thing that interested me this morning was the phrase sterilize. sterilize meaning they're not expanding the monetary supply. >> correct. >> that is the old s&p. i think the markets would be disappointed to hear that because that is not going to be reflagsary in any way. that is kind of juicing the markets. >> good stuff. we'll see what tomorrow brings. bob pisani. let's another cap on the
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markets op-ed from gary kaminsky back at hq. are you watching what i think you're watching? >> a little football because as i walked through hq this morning lots of world championship new york giant jerseys being worn here. >> yes. >> and as i was coming up with this camera shot i saw a headline, some news. you remember wayne krebet new york jet and his team, they manage a billion four. they just moved from morgan stanley over to barkleys so a good acquisition, good wide receiver. but i want to talk about football because convergence had a great morning note out today and went through a lot of the economics about football. they bring up very interesting points. check this out. 65% of household nfl fans earn more than $50,000 a year. but then they also point out that americans who earn more than $250,000 are 29% more likely to call themselves an nfl fan compared to the average american. they go through, keep that chart up there, they go through all the data out there over the last several years.
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there's been a high correlation between attendance in markets going down where the housing market has been weak and those cities where the housing market has done better. you've seen better attendance. this chart is very compelling. take a look at the attendance of what's happened. they basically said the key takeaway from all the research looking at nfl is the following. off the decline which you see on the chart it didn't occur until late last year. in 2008/2009 after the financial collapse that we had, statistically insignificant drop off in attendance. but last year as the upper middle class, that category that they say is those earning 250 and above started to really feel the pinch of the slower economy they started to basically back away from going to the games. why is that relevant? what we do when we talk about the 11:00 yesterday? this idea of what is going to happen with the fiscal cliff when those individuals come january have less disposable income in their pockets. when i read this morning note today it confirmed to me what i had heard over the weekend.
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the numbers that are out there for the retailers, many of the retailers, travel and leisure companies, for 2013, earnings estimates, are too high. they're too optimistic. you have to factor in the fact that unless something dramatically changes down in d.c. there's going to be less spending money in those pockets. the nfl data confirmed it. >> my favorite metrics from the note, nfl fans like coke over pepsi. they prefer visa credit cards and light beer over regular beer. are you with us on that? >> yes. i think the light beer makes sense. >> yes. >> you can drink more of it. >> a lot of it. >> like the pineapple infused vodkas. you can drink seven and don't feel it until the next day. was that not a great morning today? >> he is the best. nick is amazing. thanks, gary. straight ahead nokia revealing new smart phones today hoping to get a jump on competitors namely apple. the ceo of nokia will join us live with his take on the new devices. the state of the company and a lot more in just a moment. you know why i sell tools? tools are uncomplicated.
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♪ coming up at the top of the hour on halftime we'll talk to the man with the street's highest year end price target. what is it and what sectors will lead the rally there? china's hard landing and not
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just for the economy. one long time china watcher says its stock market is in for a 35% spiral. what it means to your portfolio. mark zuckerberg is not selling. should you be buying facebook shares now? carl, we'll send it back to you and also talk nfl with our resident nflers the najarian boys. >> the nfl will open its season tonight and while profits are not an issue and the league is facing pretty big headwinds brian shactman is outside the stadium in new jersey where the giants host the cowboys tonight. good morning, brian. >> reporter: exactly right. this league gets at least 3 billion a year just from television revenues. we all know the super bowl is basically a national holiday. when you said headwinds it is a perfect way to put it. i won't even mention the new orleans saints and bountygate still in court. let's start with labor. they locked out the referees and it looks like replacements will start the season. game attendance dropping. youth football participation
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also dropping. part of that is the controversy surrounding concussions which is huge both on main street and in the courtroom where 140 lawsuits involving more than 3,000 former nfl players have been filed against the league. so far the league has successfully argued compensation for injury should be collectively bargained and not mandated in court. this is something that is still ongoing. >> the litigation facing the nfl is a serious and sincere threat to the league itself with a successful league and 9.3 billion in annual revenues this litigation certainly threatens some financial stability for the league and certainly has the potential to create a black eye on an otherwise overly successful league. >> reporter: some out there say the concussion issue could mean gigantic tobacco-like settlements but even if the nfl wins in court the debate is hurting participation. examples michigan high school dropped 7% last year, 3,000
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fewer players. massachusetts five years in a row it's down. part of the specialization if you're good at baseball you're going to play in the fall too but a major part is concussions. now back to the nfl and this attendance issue which of course gary touched on briefly. last season the lowest since 2002 when they expanded to 32 teams. basically it's cheaper and more enjoyable carl to watch it at home. the league is trying to do something about that. they got wi-fi in a lot of stadiums. here at met life they don't have trouble putting fannies in the seats but even spent a couple million dollars with verizon to make sure everyone has wi-fi so you can watch replays which is a major complaint for people who go to the game. >> as we all get more connected. interesting. it's hard to separate unlike the michigan public schools the economic environment in that state when it comes to public schools but your point is well taken, brian. we'll see what happens tonight. go giants. brian shactman outside metlife stadium. meantime nokia is launching a couple new devices that run on
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microsoft's windows 8 software hoping to reinvigorate their image as a lead inner the market. john, take it away. >> hey, carl. first on cnbc interview with stephen elop ceo of nokia. very important day. the 920 and 820 announced a focus on phone, cameras, navigation. some features that seem to be ahead of where other people are. i want to start off talking about your tenure as ceo. two years in and in a way it seems like it has been longer. you identified challenges up front. what kind of grade do you give yourself? stock is down 70% but that is just one part of the evaluation. >> i think the way to put this in context is in february, 2011, we announced a new strategy for nokia. we recognized we had challenges and we said, unquestioning, we have to make big changes. we introduced a series of strategic changes, a partner with microsoft, and a number of other things. and what we've done since then had a series of important steps
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to move this company forward. for example, in late october we introduced the first lumia smart phones using windows phone software. and today another important step in that journey with the introduction of the next generation of devices the lumia 920 and 820. of course there's a lot more steps ahead. what we have to demonstrate as a team is this work translates into the right level of consumer interest and delight and based on the reactions we're seeing even here today as we show off some of the new capabilities we are very hopeful about what this ralph waldo emerson. >> you are in the most competitive dog fight in tech right now with apple, google, samsung, a lot of other players. i particularly contrast with r.i.m. when you came in you talked about nokia is on a burning platform. the r.i.m. guys took a long time to figure out their platform was burning too. that metaphor you used about a guy standing on a burning platform deciding to jump into the icy water, getting rescued, at what point in that metaphor is nokia right now?
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are you still on the platform? are you in the water? have you been rescued? >> we've put that metaphor well behind us. it served the purpose of saying we have problems and we have to energize the organization to make the changes. but now people are seeing those changes. they're seeing the great innovation coming from nokia. for example with the 920, the device we introduced today you see what we believe is the world's most innovative smart phone. as you mentioned with the best way to take pictures and video, the best way to navigate your world and of course an incredibly personal experience from windows phone 8. the point of all of this is we declared there is an issue and now we are step by step demonstrating how the full power and might of nokia can be brought to bear on the next smart phone experiences. we are very excited to be showing those off today. >> i think investors also want to understand though how are you going to get from a to b? it seems like a lot of the challenges you mentioned in that memo are still very much there. media tech. you mentioned specifically. had armed a bunch of chinese low end phone competitors to take
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nokia's share in the low end. that is still a challenge. media tech has bought m-star. they're aiming at the mid range which could hurt your profit chances with windows phone 8. how do you plan to attack that challenge as some of those low end competitors start moving up into this tier where you're trying to launch new products? >> as you know one of the many different pieces of the nokia business is not just the smart phone business but what we call the mobile phones business where we compete at the lower price points with what traditionally have been feature phone devices. this is an area where nokia has 30% market share on a worldwide basis for those devices. it's also an area where we have been introducing new technology, new innovation, and new products. for example, just in the last three or four months, we've introduced the aasha 305 and 311 products. very inexpensive products with full capabilities. i have one here. these devices are smart phone devices that have been designed
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for very low price points. they have incredibly long battery life. three, four, five days at a time. they have technology which is targeted at the emerging markets environment where people can't afford an expensive data plan necessarily or don't want to spend that money. and so we have things like proxy browser technology so downloading of that popular web page costs you 20% on this device than it does on any traditional smart phone program. so off to an early sales success with these products. >> that is great to hear. one last question because we're running out of time. how do we gauge the success of this new lumia phone? you won't give a release date yet but in terms of units and share how will we know it succeeded? >> the way we look at this and the targets we set for ourselves is to show a clear step by step growth in overall win dose phone market share and our share of that part of it. clearly in the industry today there are some big competitive forces at work. and we are pushing very hard to make sure we shift those dynamics. we think the opportunity is perfect to do that because not only is it about windows phone 8
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and what we're launching here today but also the landing of windows 8 so you'll see the same experience on phones, on pcs, on tablets. and as microsoft indicated on stage a few minutes ago, it's estimated that by the end of the next year there will be between 300 and 400 million devices out there that will be sharing this experience be that a pc tablet or phone being part of that is great. >> we'll have to leave it there. thank you so much for being first on cnbc. good luck with this phone. guys, back to you. >> good stuff. thank you for that. nokia shares off the lows but still down more than 9%. be right back.
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what happens when your ceo, majority shareholder says he is not selling for a year? a 4% pop on facebook. s&p also reiterating their buy. back in a moment. le announcer ] at scottrade, we believe the more you know, the better you trade. so we have ongoing webinars and interactive learning, plus, in-branch seminars at over 500 locations, where our dedicated support teams help you know more so your money can do more. [ rodger ] at scottrade, seven dollar trades are just the start. our teams have the information you want when you need it. it's another reason more investors are saying... [ all ] i'm with scottrade.
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